First Solar (FSLR) Sold Off After the Tariffs. It’s the Solar Stock Built to Benefit From Them
First Solar (FSLR) shares fell after U.S. solar tariffs were announced, despite the policy benefiting its business. The company's stock trades at $204, 36% below its high, and 12 times earnings. BMO upgraded FSLR to Outperform with a $263 target, citing its structural advantage. FSLR reported Q2 EPS of $3.92, gross margin near 57%, and a 45.1 GW backlog worth $13.6B through 2030. Skeptics point to underutilized plants and expected margin declines through 2027.
How this was made
The 30-second read
Why it matters
First Solar's stock is pressured despite structural tailwinds; the upgrade suggests a longer‑term accumulation thesis.
Market read
Tariff policy creates a clear competitive edge for First Solar, making the stock a potential contrarian buy amid short‑term valuation stress.
What to watch
Potential litigation costs from Series 6 warranty claims and higher warehousing expenses.
Background
The U.S. Section 232 solar tariffs set a floor price on imported crystalline‑silicon modules, uniquely favoring First Solar's cadmium‑telluride technology.
Ticker impact
BMO upgraded First Solar to Outperform with a $263 price target after the Section 232 tariff announcement, highlighting the stock's 36% decline and tariff tailwinds.
Potential upside if 2029 contract pricing improves, though near‑term volatility may persist.
Upgrade reflects structural advantage, but underutilization and litigation risks temper the upside.
Market effects
Solar sector may see re‑rating as domestic thin‑film manufacturers gain relative advantage.
U.S. renewable‑energy equities could benefit from the Section 232 tariffs.
International polysilicon exporters may face pressure, shifting capital toward U.S. manufacturers.
Counterpoint
Margin compression through 2027 and underutilized overseas plants could outweigh tariff benefits.
Key entities
- companyFirst Solar, Inc.
Largest U.S. thin‑film solar module manufacturer.
- analystBMO Capital Markets
Upgraded First Solar to Outperform with a $263 price target.
